WEBVTT DIFFERENT TONE AND TENORBEFORE THE LEGISLATURE, ASKINGFOR THEIR UNDERSTANDING ANDTHEIR FORGIVENESS.>> I AM SORRY THAT WE DID ITTHIS WAY.MIKE: STATE AUDITOR ELAINE HOWLESAID TODAY SHE'S NEVER SEEN A-->> WHILE WE BELIEVE WE DIDTHINGS APPROPRIATELY, IT ISCLEAR IN RETROSPECT THAT WECOULD HAVE HANDLED THIS BETTER.MIKE: SOME LAWMAKERS AND SEEMEDBY THE AUDIT'S FINDINGS.>> WHEN I LOOK AT THIS, I THINKONLY CAL. -- HOLY COW.MIKE: THEY COMPEL THE UNIVERSITYTO RELEASE HIS RECORDS NOTSUPPLIED TO THE AUDITOR.>> ALL OF THEIR FINANCIALRECORDS AND ALL OF THECOMMUNICATIONS THAT WEREINTERCEPTED, EDITED, TO AND FROMTHE OFFICE OF THE PRESIDENT.WE HAVE GOT TO GET TO THE FACTS.MIKE: ON THE UC DAVIS CAMPUSTODAY, STUDENTS WE TALKED TO TOLD US THEY WANT MOREINFORMATION ON HIDDEN FUNDS INTHE PRESIDENT'S OFFICE, $175MILLION, ACCORDING TO THE AUDIT.JUST 38 MILLION ACCORDING TOJANET NAPOLITANO.>> THAT MONEY SHOULD BE GOINGTOWARDS US RATHER THAN THEPEOPLE AT THE TOP.>> IT IS DISAPPOINTING.A LOT OF STUDENTS STRUGGLE WITHTUITION ON CAMPUS, SO JUSTHEARING ABOUT THAT MONEY I THINK, IT WOULD BE GREAT TO USE IT TOHELP STUDENTS.MIKE: TODAY, MORE CALLS FROMLAWMAKERS TO ALL BACK TUITION

UC president 'sorry' for office's handling of audit probe

State audit found $175M reserved by Napolitano's office

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Updated: 10:51 PM PDT May 2, 2017

SACRAMENTO, Calif. (AP) —

After a state audit found University of California administrators hid $175 million from the public while tuition increased, university system President Janet Napolitano apologized Tuesday for the way her office handled the investigation but disputed several of the audit's findings.

In an unusual show of bipartisan agreement, lawmakers from both parties said during a Tuesday hearing they are deeply troubled by the state auditor's finding that the UC president's office tried to interfere with the audit. Later in the hearing, several legislators said they appreciated Napolitano's apology and her promise to implement the audit's recommendations.

Napolitano maintained that the money in reserves actually totals $38 million, which she described as a "prudent and reasonable" amount set aside for unexpected expenses. Most of the $175 million identified in the audit funds important university programs including research grants, Napolitano said.

She agreed her office should keep clearer budget plans and records, as the audit recommended.

State Auditor Elaine Howle told lawmakers she faced an unprecedented lack of cooperation from Napolitano's office while it was under audit. She detailed efforts by the office to edit responses from individual UC campuses to survey questions from auditors.

Napolitano's office "inappropriately screened" the campuses' responses and altered statements and ratings that were initially critical of the office, the audit said.

"We felt that the surveys didn't reflect an independent voice from those campuses," Howle told lawmakers at the hearing.

Napolitano said she coordinated with the individual campuses on their audit responses to ensure they were accurate.

"My team made the decision to work with our campuses to ensure they understood the purpose of the audit and the audit's scope," Napolitano said. "I am sorry that we did it this way because it has created the wrong impression and detracted from the important fact that we accept the recommendations in the audit report."

Assemblyman Jose Medina said he found the auditor's description of interference by the president's office particularly concerning.

"To interfere in that process, to me, is undefendable," the Democrat from Riverside said. "I am extremely bothered that there was tampering."

UC administrators amassed $175 million in undisclosed surplus money over four years even as the university system raised tuition and asked the state for more funding, according to the audit released last week.

"They are not putting California students and families first, particularly with their budget," said Assemblywoman Catharine Baker, a Republican from Dublin in the eastern San Francisco Bay Area. "This is unbelievable for an institution that has in its hands the education of California students and hundreds of millions of dollars in taxpayer money and student fees."

In the report, Howle said state lawmakers should increase oversight of Napolitano's office.

Baker and several other Republican lawmakers are asking for the Democratically controlled Legislature to subpoena financial records and communications related to the surplus money the audit identified.

The UC Board of Regents in January voted to increase in-state tuition and fees $336 next academic year. Some lawmakers called for a reversal of the tuition hike in the wake of the audit.

At the hearing, several students held up signs in the audience protesting the recent tuition hike and the audit's findings. Some criticized the university's tuition rates during the comment period at the end of the hearing.